What Are The Allowable Expenses in Bankruptcy

Dangers of Bankruptcy

Bankruptcy can be very dangerous to your financial health – Never go into bankruptcy unless you are 100% sure that this is the correct option fee you! Your property or any other wealth that you may have or will received in the near future may be at risk

Average Expense Figures in Bankruptcy

When you are completing your Statement of Affairs (Debtor’s Petition)  Form 6.28   Insolvency Act 1986, there are certain figures that the insolvency service uses to calculate the disposable income of the bankrupt.

Essential Expenditure in Bankruptcy


Essential Expenditure Technical Manual Single retired adult #5 Single non-retired adult Single adult +2 children Two adults +2 children Two adults no children
Mortgage payments or rent on your home 31.7.82-84 variable variable variable variable variable
Housekeeping, including food and cleaning £208 £206 £384 £523 £403
Gas, electricity, other heating £63 £83 £96 £94 £108
Water £25 £33 £37 £37 £42
Telephone charges 31.7.92/93 £26 £34 £43 £68 £56
Travelling to and from work and other essential journeys (personal transport) 31.7.124 £64 £83 £80 £207 £196
Travelling to and from work and other essential journeys (public transport) 31.7.125 £22 £28 £27 £71 £67
Clothing 31.7.116 £29 £41 £98 £165 £108
Maintenance payments #1 and fines #2 31.7.119
Council tax #3 variable variable variable variable variable
Other possible essential expenses  –  See Technical Manual Technical Manual
TV licence (£145.50 per year or £12 per month) 31.7.110
Insurance policies (except motor) 31.7.117
Mobile phone costs 31.7.92
Dry cleaning 31.7.116
Children’s school meals (check for exemptions)
After school clubs and trips 31.7.94
Childcare – if parent/s are working 31.7.95
Dentist 31.7.122
Prescriptions #4 (£7.20 per item) – England 31.7.121
Opticians 31.7.122
Pets (evidence to be provided) 31.7.116
Professional body membership (unless paid by employer) 31.7.107
Hairdressing and personal care 31.7.116
Rent arrears 31.7.82
Broadband computer costs 31.7.93
Holidays 31.7.116

Not Considered Essential Expenditure in Bankruptcy

This really I think is an important section to make note of especially “excessive mortgage payments”, in other words you may be forced to move  to a property where the rental payments would be much less than the current mortgage payments. Therefore it is recommended that you check out 31.7.85-91 of the insolvency service technical manual.

Social and entertainment expenditure 31.7.113
Pocket money for children
Gym membership 31.7.114
Sports and club membership 31.7.114
Satellite and cable TV 31.7.110
Private healthcare
Excessive mortgage payments 31.7.85-91
Additional pension contributions 31.7.109
Charity/religious tithing 31.7.115
Cleaning, gardening and ironing services 31.7.116

Bankruptcy can be a great solution for getting rid of your debts, but at what cost. Never enter into bankruptcy until you are sure that it is safe to do so  in your particular scenario. Get professional advice!

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